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Enslaved by free trade
June 24, 2003 12:59 PM   Subscribe

Enslaved by free trade. The founding myth of the dominant nations is that they achieved their industrial and technological superiority through free trade. Nations that are poor today are told that if they want to follow our path to riches they must open their economies to foreign competition. They are being conned.
posted by badstone (31 comments total)

 
this pinched nerve under my left buttock is really bugging me lately. what should I do about it?
posted by angry modem at 1:12 PM on June 24, 2003


Wendell Berry's The Idea of a Local Economy is a good read for people interested in the issue, although Berry is not immune from sounding dogmatic.

'UNSURPRISINGLY, AMONG PEOPLE WHO WISH to preserve things other than money - for instance, every region's native capacity to produce essential goods - there is a growing perception that the global "free market" economy is inherently an enemy....'

'Albert Schweitzer, who knew well the economic situation in the colonies of Africa, wrote nearly sixty years ago: "Whenever the timber trade is good, permanent famine reigns in the Ogowe region because the villagers abandon their farms to fell as many trees as possible." We should notice especially that the goal of production was "as many...as possible." And Schweitzer makes my point exactly: "These people could achieve true wealth if they could develop their agriculture and trade to meet their own needs." Instead they produced timber for export to "the world economy," which made them dependent upon imported goods that they bought with money earned from their exports. They gave up their local means of subsistence, and imposed the false standard of a foreign demand ("as many trees as possible") upon their forests. They thus became helplessly dependent on an economy over which they had no control.

'Such was the fate of the native people under the African colonialism of Schweitzer┬╣s time. Such is, and can only be, the fate of everybody under the global colonialism of our time. Schweitzer's description of the colonial economy of the Ogowe region is in principle not different from the rural economy now in Kentucky or Iowa or Wyoming. A total economy for all practical purposes is a total government. The "free trade" which from the standpoint of the corporate economy brings "unprecedented economic growth," from the standpoint of the land and its local populations, and ultimately from the standpoint of the cities, is destruction and slavery. Without prosperous local economies, the people have no power and the land no voice.'

Comparative advantage is one thing, and it's a force to be reckoned with. But it shouldn't be the only one.
posted by weston at 1:14 PM on June 24, 2003


We've already done this to ourselves here in America. We're all wage slaves, subservient to an international market, rather than building our own wealth on our own terms on our own land.

The person who toils for low-end wages and pays rent in urban poverty would live a better life with less effort if he were working on more direct sustenance in a smaller community that is within an economically self-reliant region.

Instead of worrying about what "free trade" might do to the rest of the world, I'd rather try to fix the damage that national and international markets have already done here at home.

Want to defend against terrorism? Then don't build your sustenance around dependence on long-range transportation and everything it entails ("outsourcing" labor, sending South Dakota beef to factories in Virginia to be made into frozen dinners that are shipped back to South Dakota, etc.). This kind of infrastructure is incredibly fragile.

Never mind. Just drink your Brazilian coffee latte while sitting in front of your Malaysian-labor computer, toiling away at work that is so far removed from meaningful sustenance that you probably can't imagine what I'm talking about.

I'm probably some Marxist whack-job anyway.
posted by yesster at 1:32 PM on June 24, 2003


yesster: you perhaps prefer South Dakota coffee?
posted by divrsional at 1:41 PM on June 24, 2003


Humans certainly love to rationalize.
posted by larry_darrell at 1:54 PM on June 24, 2003


badstone, you forgot to supply the "print" page. Or, at least, provide all (to avoid subjectivity) important points of the article.
posted by MzB at 1:59 PM on June 24, 2003


That's not the point. If you open a Starbuck's in South Dakota, then your subjecting yourself to forces way beyond your control: politics in South America, oil costs, trucking issues, etc. Instead, if you want to be an independent proprietor in South Dakota, you open a corn-based business and develop relationships with the local farmers.
posted by yesster at 2:00 PM on June 24, 2003


What if the citizens of SD want coffee?
Or am I being obtuse?
posted by trharlan at 2:06 PM on June 24, 2003


Then buy all you want, just don't become dependent on it. NEEDS should be met locally, and only luxuries on the broader market. Otherwise your life is incredibly vulnerable to disruption.
posted by yesster at 2:11 PM on June 24, 2003


It is, of course, a matter of much contention as to what are needs and what are wants, and the dichotomy is a silly and false one anyhow. Don't even get me started on "local" and "global" and "national" distinctions.

I'm probably just some post-structuralist whack-job anyway.
posted by Pseudoephedrine at 2:21 PM on June 24, 2003


badstone, you forgot to...

Sorry about that. Didn't realize you had to register. I must still have a cookie set from a while back when I had to change my subscription address.

I can summarize with a little more cutting and pasting I guess:

2nd paragraph:
Almost every rich nation has industrialised with the help of one of two mechanisms now prohibited by the rules of global trade. The first is "infant industry protection": defending new industries from foreign competition until they are big enough to compete on equal terms. The second is the theft of intellectual property. History suggests that technological development may be impossible without one or both.

[a bunch of historical examples of industry protection and IP theft by presently powerful countries...]

2nd to last paragraph:
Those nations that are poor today are forbidden by trade rules from following either of these routes to development. Their new industries are immediately exposed to full competition with established companies overseas that have capital, experience, intellectual property rights, established marketing networks and economies of scale on their side. "Technology transfer" is encouraged in theory, but forbidden in practice by an ever fiercer patents regime. Unable to develop competitive enterprises of their own, the poor nations are locked into their position as the suppliers of cheap labour and raw materials to the rich world's companies. They are, as a result, barred from advancing beyond a certain level of development.
posted by badstone at 2:50 PM on June 24, 2003


For those fortunatge enopugh to live in the U.S., a land with abundance, but of course not for all, there is one clear thing to do with what you own, posses: spend it while you live and let your heirs take care of themselves.
posted by Postroad at 3:24 PM on June 24, 2003


Tell me more yesster, please. [not to be read sarcastically]
posted by Witty at 3:27 PM on June 24, 2003


NEEDS should be met locally, and only luxuries on the broader market. Otherwise your life is incredibly vulnerable to disruption.

Can you give some specific examples of the kind of disruptions you're talking about? Widespread or long-term disruptions of the supply chain that have already occurred owing to, for example, terrorism or political turmoil?

I suppose there IS the Arab oil embargo, but then there's also the Arctic National Wildlife Refuge; and besides, most people don't think another embargo would be feasible.
posted by coelecanth at 3:33 PM on June 24, 2003


Almost every rich nation has industrialized with the help of one of two mechanisms now prohibited by the rules of global trade. The first is "infant industry protection": defending new industries from foreign competition until they are big enough to compete on equal terms. The second is the theft of intellectual property.

Having high tariffs does not help the internal industry as it will fail to innovate. Example: Bethlehem Steel (and the USA steel industry). There was no major restriction for the US market during 50-70's, but the industry was protected since there was no outside threat. The profits were good, but they preferred to use the same old manufacturing techniques.

From what I know, we need a third factor: internal competition. Example: MITI in Japan decided at the beginning of '50s to protect the Japan car market and encourage 2 or 3 companies to grow very big. Instead, about 12 new companies joined the market and kept Nissan and Toyota competitive.
posted by MzB at 3:49 PM on June 24, 2003


also, Blue Stone made a similar post today. are you guys related? ;-)
the article linked might do a better job at explaining local vs global issues
posted by MzB at 4:07 PM on June 24, 2003


coelecanth: see the Schwietzer-given example in my comment above. Although I don't think *all* needs should continually be met locally, I think it's important to conserve capacity to do so (as well as innovate in new capacities), or at least think about reserves.

MzB: your internal competition is a good insight, and a necessary ingredient. I'd think that a lack of competition is probably rarely the hallmark of an infant industry, and so if you see consolidation and stagnation at home, chances are it's safe to lower trade barriers. Might be wrong about that, tho'... I suppose an early innovator could get an IP grip on some specific inventions and keep a lock on them for some time. Pharmaceutical corps? Hmmm.
posted by weston at 4:21 PM on June 24, 2003


It's kind of refreshing to see people talk about "subsistance lifestyles" in something other than highly negative tones. Most of the justification for increasing free trade is that it will "lift the poor out of subsistance agriculture". But isn't subsistance, at the end of the day, all that we need? Maybe I'm just a dirty young hippie who dreams of a half-acre of permaculture out the back. Maybe I just watched too much of BBC's "The Good Life" back in the day. But I do feel most economic (and indeed environmental) problems can be boiled down to people been too separated from the source of their products.

People don't know their "ecological footprint". For a lot of people, the initial source of their income is obscured behind layer-upon-layer-upon-layer of economics. A farmer knows where his income comes from. He grows something. He sells it or consumes it. Where does a productivity consultant's income come from? Who knows In a way that acts as a buffer, but it also absolves responsibility.

The problem, as trharlan pointed out, is that we can't just expect people world wide to live off the food able to be produced on a small scale in their local areas. But surely, small scale economy and trade should be a higher priority than global trade?
posted by Jimbob at 5:27 PM on June 24, 2003


But isn't subsistance, at the end of the day, all that we need?

Nobody but you is stopping you from going out and scratching dirt for your supper-by-the-sweat-of-your-brow. You can start anytime.

A farmer knows where his income comes from. He grows something. He sells it or consumes it.

He has a hand in growing something. So do the people who make his tractor. So do the people who mine the ore to make the tractor. So do the people who make the machines to mine the ore to make the tractor. So do the people who mine the ore to make the machines to mine the ore to make the machines that make tractors. So do the people who design the tractor. So do the people who train the tractor designers. So do the people who breed the seed. So do the people who train them. So do the people who provide infrastructural support for the people who train the people to be tractor designers and seed breeders. So do the transport drivers who bring the tractors to the farmer and take away whatever he grows.

Independence like that is a pure myth. He doesn't grow some food. He, and a gigantic pile of capital, and a towering amount of other people's labor, grow some food.

Where does a productivity consultant's income come from?

The productivity consultant's fee comes from the increased productivity of the firms he consults to, or at least the expectation of that.
posted by ROU_Xenophobe at 6:56 PM on June 24, 2003


Independence like that is a pure myth. He doesn't grow some food. He, and a gigantic pile of capital, and a towering amount of other people's labor, grow some food.

That's the whole point. You're talking about a different kind of farmer than I am. You're talking agribusiness. I'm talking subsistance agriculture, as I made clear in the first paragraph. The vast majority of those steps are non-existant, and some (like commercial seed breeders) run opposite to the whole idea.
posted by Jimbob at 7:04 PM on June 24, 2003


So, let's see, the conspiracy theorists are afraid that when *they* take over, they'll force Microsoft engineers to dig ditches. The eco-extremists think it would be a good thing for Microsoft engineers to dig ditches, people needing yams more than software. The third and fourth world advocates just want US Microsoft engineers to dig ditches, so that local engineers could compete with them by doing their software engineering--it's only fair. I also gather that Conservatives want Microsoft engineers to exclusively do engineering in lieu of everything else, including eating, bathing, sleeping and reproducing. Good for productivity.
Microsoft itself wouldn't mind if it could outsource their jobs, and if so, they can dig ditches for all Microsoft cares.

(Insert witty comment about Linux here.)
posted by kablam at 7:34 PM on June 24, 2003


One might want to keep in mind the historically routine failure of subsistence agriculturalists to subsist, since they had put all their subsistence eggs in a single basket and, in the fairly common event that the basket got upset, they died failed to subsist. OR, they saw the writing on the wall, agriculturally-speaking, and took their subsistance ploughshare, beat it into a sword, and subsisted on their neighbor's agriculture.
posted by UncleFes at 9:00 PM on June 24, 2003


That's the whole point. You're talking about a different kind of farmer than I am. You're talking agribusiness. I'm talking subsistance agriculture, as I made clear in the first paragraph. The vast majority of those steps are non-existant, and some (like commercial seed breeders) run opposite to the whole idea.

Like I said, the only person stopping you from scratching dirt as a subsistence farmer is yourself. All you need is transportation to somewhere remote and vaguely arable, some heirloom seed, a stone hand-axe to fashion lovely preindustrial tools, a willingness to engage in backbreaking labor on a regular basis, and a tolerance for nutritional deficiencies and a monotonous diet. Of all these, only the transportation is at all costly. You seem not to be choosing that, though.
posted by ROU_Xenophobe at 9:15 PM on June 24, 2003


I have never advocated any thing you have just suggested, ROU. I never even suggested it, so I don't know where you got it from. I think you're deliberately missing the point, which was that focus should turn to local economy over global economy. That doesn't mean scratching at the dirt with a stone axe. That means understanding the value of local markets and production, and understanding the costs of global trade. Like that transporation cost you're so concerned about. Why should I waste my money paying a premium to ship bananas from thousands of kilometers away in the tropics, when I would be better off with locally grown produce instead?

By the way, I'd like you to attempt to do an analysis on the productivity consultant's income source in the same way you did the farmers. You seem to have put a lot more effort into one than the other.
posted by Jimbob at 9:26 PM on June 24, 2003


I have never advocated any thing you have just suggested, ROU. I never even suggested it, so I don't know where you got it from.

You were advocating subsistence agriculture, and later seemed to be advocating subsistence agriculture on a solo basis without the use of industrial products like tractors (which will also rule out most metal implements). If, when you say things like "It's kind of refreshing to see people talk about `subsistance lifestyles' in something other than highly negative tones" or "But isn't subsistance, at the end of the day, all that we need," you don't mean to actually advocate subsistence agriculture, then I withdraw my comment.

Why should I waste my money paying a premium to ship bananas from thousands of kilometers away in the tropics, when I would be better off with locally grown produce instead?

(1) No one is making you. Don't, then; it's a free country. Eat what's from your backyard, or what you can get that's produced in an N-mile radius.
(2) If you want bananas, and not apples or whatever else can be grown locally, then you are in fact *worse* off with the apples.
(3) Because it's winter and you have exactly zero fresh fruit.

By the way, I'd like you to attempt to do an analysis on the productivity consultant's income source in the same way you did the farmers.

Fine. The consultant's output will depend on the quality of his (or her, throughout) training, on mental effort of theorists and researchers in his field, on the availiability of cheap travel (and all the machinists, ore miners, designers, and whatnot that make that happen), on having some level of staff support or its equivalent, probably on having cheap computing and all of the industrial activity that implies, on existing productivity levels in the relevant industry, and in some small way on his own efforts.
posted by ROU_Xenophobe at 10:17 PM on June 24, 2003


Dear Witty sir: An article by one Barry Lynn discusses the potential drawbacks of dependence on decentralized manufacturing.

"Some see beauty in this system. In a borderless world, each company and each community can concentrate on what it does best, be it growing artichokes, stamping out motorcycle gears, designing marketing strategies, or engineering global assembly lines. Unfortunately, such concentration--the growing reliance by entire industries on single sources of supply--violates one of the most basic rules of manufacturing, which is always to have an alternative at the ready."
posted by raaka at 11:10 PM on June 24, 2003


Um, ROU_Xenophobe, subsistence farming does not require that its disciples be Neolithic mud-hutters. The term, as you well know, merely describes a production ethic which is not surplus oriented, and which encourages the local consumption of whatever surplus is produced.

The Amish, to the degree that they can be, are subsistence farmers.

It's always fun to point out harsh realities, which you've done with panache, but your harsh reality is a bit harsher than it has any right to be.

I think Jimbob was speaking with a wistful, Wendell Berryish accent. I don't think that, but for your timely cautions, he was on the verge of stripping himself naked and disappearing into the Black Hills. Seems silly to drag him though it just to make the relatively obvious point that the 'subsistence' in 'subsistence farming' means, well, it means 'subsistence'.
posted by Opus Dark at 3:28 AM on June 25, 2003


George Monbiot's most recent article (a mea culpa of sorts)presents convincing arguments against "localisation" from the left and the (misnamed) anti-globalization movement:

Localisation insists that everything which can be produced locally should be produced locally. All nations should protect their economies by means of trade taxes and legal barriers. The purpose of the policy is to grant nations both economic and political autonomy, to protect cultural distinctiveness and to prevent the damage done to the environment by long-distance transport. Yet, when you examine the implications, you soon discover that it is as coercive, destructive and injust as any of the schemes George Bush is cooking up.
My conversion came on the day I heard a speaker demand a cessation of most forms of international trade and then, in answering a question from the audience, condemn the economic sanctions on Iraq. If we can accept that preventing trade with Iraq, or, for that matter, imposing a trade embargo on Cuba, impoverishes and in many cases threatens the lives of the people of those nations, we must also accept that a global cessation of most kinds of trade would have the same effect, but on a greater scale.
.

This is an impressive admission of error and his arguments are quite convincing.
Still, and on this topic, GM has written a very concise argument against the current way that free trade works entitled "Enslaved by Free Trade", which is worth reading.
posted by talos at 4:54 AM on June 25, 2003


um, ROU_Xenophobe, subsistence farming does not require that its disciples be Neolithic mud-hutters.

No, but becoming a neolithic or classical-era subsistence farmer is well within Jimbob's capabilities. I can only conlude, since he hasn't done it, that he just has some emotional attachment to some of the trappings of it and doesn't actually think it's a good way of life.

The Amish, to the degree that they can be, are subsistence farmers.

Most of what I've read about Amish farmers tends toward the opposite -- they're highly mechanized (in a nineteenth century sort of way), efficient farmers who primarily grow grain as a money crop.

I think Jimbob was speaking with a wistful, Wendell Berryish accent. I don't think that, but for your timely cautions, he was on the verge of stripping himself naked and disappearing into the Black Hills.

It's just a touchy point for me. I don't like it when people look out at environmental problems and poverty and all that and then hold up what looks to me like universal grinding poverty as the solution. I don't want to be poor, and I don't want others to be poor. It might be harder to find ways to get there, but I want my flying car and my robot servants and my vacation house on the slopes of Pavonis, and I think everyone should be rich enough for that too, and I want a nice clean pleasant earth also.
posted by ROU_Xenophobe at 9:24 AM on June 25, 2003


Heh! I just realised:
I couldn't read the linked article because of the registration thing. So I joined the discussion anyway and posted a related story I had read [second link], which, unwittingly, turned out to be... a free version of the linked article.
posted by talos at 9:33 AM on June 25, 2003


"The founding myth of the dominant nations is that they achieved their industrial and technological superiority through free trade...." - It's a vicious myth. In reality, they merely have discovered the secrets of cargo. John Frum deliver us!
posted by troutfishing at 3:33 PM on June 29, 2003


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